Environmental advocates are calling for a new fee on heating oil and propane to help pay for expanded energy efficiency programs.
The Public Service Board is being asked to recommend the fee in a report it’s preparing for legislators.
Earlier this year a bill that would have doubled the .5 percent excise tax levied on home heating fuels failed to make it out of a house committee in Montpelier.
At that time proponents of the increase were armed with a new report by Vermont’s Thermal Efficiency Task Force which recommended an increase in the tax on fuel oil, kerosene, propane, coal and natural gas.
This time, they hope to convince the Public Service Board to back a similar fee in a report it's preparing for legislators. The additional revenue would be used to meet the state’s goal of weatherizing 80,000 homes by 2020. It’s hoped that would also help reduce the use of fossil fuel for heating in Vermont.
In a letter to the board Conservation Law Foundation attorney Sandra Levine suggests the PSB take an approach similar to what has already done with electricity, where a fee is added to utility bills to help pay for energy efficiency.
Levine says the fact a similar fee isn’t levied on fuel oil, propane, pipelines and fossil fuel power plants in Vermont represents a basic unfairness in how efficiency programs are funded.
“Let’s do for oil and propane customers the same as we do for electricity customers. If anything, there’s a loophole currently that’s excluding oil and propane from really fully participating in broadening energy efficiency, reducing greenhouse gases and reducing costs to customers throughout the state,” says Levine.
Levine says the board is in a better position than the Legislature to assess how to best implement a fee on fossil fuels.
Vermont Fuel Dealers Association executive director Matt Cota says he expects the issue to come up again when the Legislature reconvenes in January and, once again, his group will take the position it has in the past.
Cota says if the goal is to reduce fossil fuel use, that’s already happening without any additional fees being added to fuel oil.
“The unregulated efficiency market does a better job than the regulated one. The amount of fuel, heating oil that we’ve consumed per home in Vermont has gone down dramatically – 60 percent over the last 40 years. That’s far better than the regulated utilities,” he says.
Cota says market forces, such as rising prices and consumer demand for more efficiency, have driven fuel oil consumption down. And he argues that any fee that adds to the cost of heating fuel is a regressive tax that will fall more heavily on lower-income Vermonters.
Supporters of the additional fee for fossil heating fuels argue that it’s important to reaching Vermont’s thermal efficiency goals - and they say weatherizing 80,000 homes will benefit those most in need of relief from high heating bills.
The Public Service Board is due to issue its report to legislators by Dec. 15.
